FTX Lawsuit Against Sam Bankman-Fried's Parents Faces Dismissal Bid
The attorneys emphasized that neither Bankman nor Fried held executive roles within the debtor entities, and the lawsuit failed to establish their direct involvement in alleged misconduct.
Joseph Bankman and Barbara Fried, parents of FTX founder Sam Bankman-Fried, are seeking the dismissal of the lawsuit filed against them by FTX. The lawsuit, initiated in September 2023, aims to recover damages, alleging fraudulent transfers and breaches of fiduciary duties.
In their defense, Bankman and Fried's lawyers argued that the familial relationship is not a basis for legal action. They asserted that the plaintiffs, including FTX and Alameda Research debtors, were attempting to exploit the fact that Bankman-Fried is associated with the debtor entities, according to report by The Block.
The motion to dismiss follows FTX's complaint, which claimed that Bankman and Fried utilized their influence within FTX to benefit themselves at the expense of debtors and creditors.
The September filing alleged that Bankman referred to Alameda as a "family business" and used funds from debtors to purchase a $16.4 million luxury property in The Bahamas. The parents denied these claims, stating that Bankman's familial relationship with Bankman-Fried did not make him a de facto director of Alameda or FTX US.
Furthermore, the lawsuit accused Bankman and Fried of advocating for substantial political and charitable contributions, including to Stanford University, to enhance their professional and social standing. The defense argued that these allegations lacked legal significance as they did not demonstrate any personal benefit received by Bankman or Fried.
The dismissal bid marks the latest development in the legal proceedings between FTX and Sam Bankman-Fried's parents, highlighting the complexity of the case involving familial ties and alleged financial misconduct within the cryptocurrency exchange.
